BRAZIL Law and Practice Contributed by: Ihury Bastos Pereira Darmont, Filipe Starzynski, Karyn Yoshisaki, Ariel Goldstein and Artur Marangoni Cabral Fagundes, Darmont Advogados
1. General 1.1 General Overview of Jurisdiction
em Participações ). The service chain is mature, with fund managers and fiduciary administrators who need authorisation from the CVM to operate. Additionally, depending on the vehicle and strategy, other service providers – many of whom also require authorisation from the CVM to operate – are necessary, such as custodians, securities registrars, independent audi - tors, and collateral verification and collection agents. Currently, with the rise in the basic interest rate (SELIC), investors in Brazil have been seeking fewer variable income assets and more fixed income assets. The scenario has also opened up space for new prod - ucts for the fund industry and credit market. This high-interest-rate environment has also been positive for the FIDC industry. The net worth of these vehicles grew by around 10% in the first six months of 2025, reaching BRL687 billion, according to data from ANBIMA. FIDC were also responsible for net inflows of BRL20.7 billion in the period – the second-highest among funds, behind only traditional fixed income. 1.2 Key Trends In a scenario of high interest rates, alternative and fixed income funds in Brazil have become an attrac - tive option for investors and the entire credit market. This includes incentive debenture funds and other alternatives that offer solid returns with lower risk. On the tax front, new provisional measures and laws are being enacted frequently, such as Law No 14,754/2023, which establishes income tax withhold - ing rules applicable to individuals on investments in offshore assets, such as financial investments, con - trolled entities and trusts abroad. In addition, this law introduced significant changes in the taxation appli - cable to investment funds in Brazil. 2. Funds 2.1 Types of Alternative Funds and Structures The main structures of alternative investment funds in Brazil are described in the normative annexes to Resolution No 175. Investment funds may be differ - entiated primarily by the type of strategy and asset they can invest in, and the following types of vehicles
Brazil has a modern and robust legal framework governing its investment fund market. The Brazilian Securities and Exchange Commission ( Comissão de Valores Mobiliários , or CVM) is the main regulatory agency, and the Brazilian fund industry also has very influential self-regulatory agencies, such as the Brazil - ian Association of Financial and Capital Market Enti - ties (ANBIMA), which has more than 1,500 institutions that follow its self-regulatory codes. In recent years, several changes have positively impacted the fund industry in Brazil, including the enactment of Federal Law No 13,874, of 20 Septem - ber 2019, also known as the “Economic Freedom Law” ( Lei de Liberdade Econômica ). Essentially, this law introduced important changes for investment funds in Brazil, including the provision of limited liability to the amount invested for investors and the possibility of creating classes of quotas with segregated assets and distinct rights. Resolution No 175 issued at the end of 2022 became the new regulatory framework for investment funds in Brazil, modernising, simplifying and unifying the previ - ous rules – which had been scattered for each type of fund – adopting a more flexible and efficient structure inspired by international models (the umbrella fund model). Resolution No 175 also introduced a model of classes and subclasses, allowing for different invest - ment strategies within a single General Taxpayers’ Registry (CNPJ), which results in greater transparency, diversity of options, and reduced operating costs for managers and investors. The most commonly used vehicles are Financial Investment Funds ( Fundos de Investimento Financei- ros ) – among which are Multimarket Investment Funds ( Fundos de Investimento Financeiros Multimercados ) – Credit Rights Investment Funds ( Fundos de Inves- timento em Direitos Creditórios – FIDC), Real Estate Investment Funds ( Fundos de Investimento Imobiliári- os ), Investment Funds for Agroindustrial Production Chains ( Fundos de Investimento nas Cadeias Produ- tivas Agroindustriais ), and Private Equity and Venture Capital Investment Funds ( Fundos de Investimento
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